Credit Life Insurance Creditor Life Insurance

Definition of "Credit life insurance (creditor life insurance)"

Laura Uribe real estate agent
Laura Uribe Tropic Shores Realty

Insurance issued to a creditor (lender) to cover the life of a debtor (borrower) for an outstanding loan. If the debtor dies prior to repayment of the debt, the policy will pay off the balance of the amount outstanding. Credit life insurance is sold on a group or individual basis, and usually is purchased to cover small loans of short duration. When issued under a group policy, a certificate is issued to the debtor, the master policy being issued by the creditor. The face value of a credit life insurance policy decreases in proportion to the reduction in the loan amount until both equal zero.

Have a question or comment? We're here to help.

*** Your email address will remain confidential.

Search Real Estate Terms

Popular Real Estate Terms

Popular Real Estate FAQ